BOSTON – A North Carolina man was sentenced yesterday in
federal court in Boston for his role in a market manipulation scheme which was
actually part of an undercover operation.
David Aubel, 60, of Matthews, N.C., was sentenced by U.S.
District Court Chief Judge Patti B. Saris to 87 months in prison, five years of
supervised release and ordered to pay restitution in the amount of $242,553. In
November 2017, Aubel pleaded guilty to one count of conspiracy to commit
securities fraud and wire fraud, one count of securities fraud, and three counts
of wire fraud.
In 2016, Aubel and co-conspirator Robert Raffa, of Penacook,
N.H., were arrested and charged in a criminal complaint in connection with
their involvement in a scheme to manipulate the market for the publicly traded
securities of Green Energy Renewable Solutions, Inc., a penny stock company
that claimed to be in the business of developing and operating waste processing
and recycling facilities near Detroit, MI. Raffa previously pleaded guilty and
was sentenced in January 2018 to two years in prison and two years of
supervised release.
In early 2012, Raffa and Aubel used four foreign entities to
covertly acquire nearly all of Green Energy’s unrestricted stock without
reporting their controlling interest as required by law. They then hired a promoter to send blast
e-mails touting Green Energy to potential investors, all while selling shares
without disclosing that they had orchestrated the campaign encouraging
investors to buy.
The initial promotion enabled Raffa and Aubel to sell more
than 1.5 million shares of Green Energy stock for proceeds of about $900,000.
However, Raffa and Aubel continued to control a substantial amount of Green
Energy stock after the promotion ended, and they used manipulative trading
techniques to stabilize Green Energy’s stock price while they searched for
another promoter to run a second touting campaign. Their search led them to a
stock promoter who was secretly cooperating with federal agents and an undercover
agent who claimed to have access to a network of corrupt stockbrokers who would
buy their shares in exchange for kickbacks. Raffa and Aubel executed a trade in
which they sold 174,000 shares of their Green Energy stock to an account
purportedly controlled by a corrupt broker, which was in fact controlled by
federal authorities. Following the trade, the conspirators wired a $6,000
kickback payment to an account they believed to be controlled by the corrupt
broker, but which was actually controlled by federal authorities.
In November 2018, Aubel was charged with bail jumping after
repeatedly failing to appear for sentencing before Judge Saris. U.S. Marshals
located and apprehended Aubel as he exited a hotel in Charlotte, NC.
In a parallel action, the Securities and Exchange Commission
(SEC) previously charged Aubel and Raffa with securities fraud in connection
with the scheme.
United States Attorney Andrew E. Lelling and Joseph R.
Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation,
Boston Field Division, made the announcement. Gregory Allyn Forest, U.S.
Marshal of the Western District of North Carolina, and John Gibbons, U.S.
Marshal of the District of Massachusetts provided assistance with the
apprehension. The United States Attorney’s Office received valuable assistance
from the SEC. SEC Attorney Andrew Palid, who was appointed as a Special
Assistant U.S. Attorney, and Jordi de Llano, Deputy Chief of Lelling’s
Securities & Financial Fraud Unit, prosecuted the case.
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